The Fourth Circuit Blows It

Awhile ago I lavished praise on District court Judge Joseph Goodwin’s decision in Eckelberry v. Reliastar Life Ins. Co., 402 F.Supp.2d 704 (S.D.W.V. 2005). You can read about it here. Sadly, last week the U.S. Court of Appeals for the Fourth Circuit reversed that decision. You can read the Fourth Circuit decision here.
The title of this post may sound harsh but if you read the two decisions side by side, I think you’ll have to agree that the reasoning of the Circuit court opinion is lacking in substance compared to the District court’s analysis. The Circuit ruling gives lip service to the test to be applied to determining whether Earl Eckelberry's death was accidental but ignores a meaningful, realistic application of it to the facts of the case. The bottom line is that according to the Fourth Circuit, a reasonable person getting into their car with a BAL of .15 would believe that death is highly likely to occur as a result of driving. Thus, in the statistically remote event that he is killed on that particular car trip as a result of his intoxication, it is not an accident. If you believe that people who drink and drive think it is highly likely they will be seriously injured or die as a result, take a look at the information in Judge Goodwin’s original opinion. It will almost certainly change your mind. The Fourth Circuit opinion doesn’t even deal with the facts concerning how frequently fatal accidents occur as a result of drinking and driving.
We hear the words “activist judges” tossed around a lot these days. Usually it’s in the context of a political discussion. For my part, it’s a pretty meaningless phrase. I usually hear if from folks unfamiliar with our judicial system and the generally high quality of our federal and state court judges in this country. But if it means anything, it refers to a judge who approaches a case looking to reach a particular result regardless of the facts and the law. By that measure, this decision is an excellent example of activist judging.
You can also read Roy Harmon’s comment on this Fourth Circuit decision here at his excellent health plan law blog.

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2 Comments to "The Fourth Circuit Blows It"

Brian:
Thanks for providing this case. It seems that the administrator needed to prove only that its denial was reasonable. Under that criteria, there seems to be little argument.
However, practiaclly speaking, we humans, when assessing risk, tend to feel our odds are better than average. This type of "it cannot happen to me" thinking never seemed to enter the discussion. In my opinion, without at least honoring this very human way of thinking, the argument loses a lot of subjectivity and objectivity.
Don Levit

Posted by Don Levit
on November 17, 2008 at 01:47 PM

Don, your separation of the objective and subjective perspectives is important. The facts of the case do not suggest Earl Eckelberry had a subjective belief that he would get home in anything but one piece. The problem is that his subjective perspective is not the only one a court must consider. It must also determine whether a reasonable person, from an objective perspective, would think that driving home drunk is highly likely to result in death or serious injury. That calls into play the kind of overview of statistics that the trial court considered and the appeals court did not and that I think make the answer to the question very easy.

You also allude to the standard of review being whether the insurer acted reasonably. It is certainly true that if you ask whether an insurer's denial was "reasonable" you may come up with a different conclusion than if you ask whether the insurer's denial was "right." It is more difficult to reverse an insurer's denial under the former framework, an arbitrary and capricious standard of review, than it is to reverse an insurer's denial under the latter framework, a de novo standard of review.

We can all agree that what constitutes an "accident" is one of the really fascinating questions in the law!

Posted by Brian S. King
on November 17, 2008 at 01:47 PM

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